When Demand Is Elastic, a Fall in Price Causes Total

question 253

Multiple Choice

When demand is elastic, a fall in price causes total revenue to rise because

• A)when price falls, quantity sold increases so total revenue automatically rises.
• B)the increase in quantity sold is large enough to offset the lower price.
• C)the percentage increase in quantity demanded is less than the percentage fall in price.
• D)the demand curve shifts.

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Definitions:

Random Assignment

The process of selecting participants for experimental and control groups by using a chance procedure to guarantee that each participant has an equal probability of being assigned to any of the groups; a control for selection bias.

Participant

An individual who takes part in a study or experiment, providing data for researchers to analyze.

Equal Chance

The principle that each participant or subject in a study has an equal probability of being chosen for any given condition or treatment.

Confounding Variable

is an external factor in a research study that may affect the outcome of the experiment, leading to inaccurate conclusions if not controlled.